By Rajendra Jadhav

MUMBAI (Reuters – Palm oil became the most costly of all the edible oils as people rush to get replacements for oil shipments that had been cut by Russia’s invasion of Ukraine.

The record palm oil price premium over other oils may cause consumers in Asia and Africa to be more sensitive to prices. This could make it harder for them to cut back on their consumption and switch to cheaper soyoil.

Crude palm oil (CPO), is available in India at $1,925 per tonne (includes cost insurance and freight) for March shipment. This compares to $1,865 when it comes to crude soybean oil.

Crude sunflower oil was not offered by traders as the port is closed because of Ukraine crisis.

Palm oil vaults to historic premium over soyoil in India, sparking shifts in buying patterns https://tmsnrt.rs/35ceWXD

60 percent of the world’s sunflower oil production is located in the Black Sea, while 76% of its exports are made to this region. Until the invasion is over, ports in Ukraine will be closed.

European and Asian refiners increased palm oil purchasing for the replacement of sunoil. A Mumbai-based merchant with a global trade firm said that this buying had pushed palm oil up to an absurdly high price.

They have the choice of purchasing soyoil. He said that soyoil is not available immediately and takes longer to reach Asia than palm oil.

Dry weather is predicted to cause a drop in soybean production in Argentina and Brazil, as well as Paraguay.

A Kuala Lumpur-based edible oils dealer stated that palm oil was traditionally used by price-sensitive Asian buyers due to its low cost and fast shipping times. However, they now pay more than $50 per Tonne for soyoil or sunoil.

However, palm oil’s temporary price premium could disappear in the coming weeks, as buyers move to soyoil, which is due for shipment April.

Malaysia supplies most of the palm oil incrementally, since Indonesia has placed restrictions on its exports.

The surge in demand is causing rapid depletion of Malaysian stocks. He said that it is the largest beneficiary of the current geopolitical environment.